Zions Bancorp. will start marketing its SBA loans to West Coast clients of California Federal Bank under a deal signed last week between the Utah bank and the thrift.

"This gives us instant access to a market that is very hard to penetrate," said Scott Stapert, vice president of sales and marketing for Zions First National Bank, Salt Lake City. Zions will process, approve, and fund the loans for California Federal customers. The bank will use its Small Business Administration loan division in St. Louis, Mo., to make lending decisions within 48 hours.

Zions will pay California Federal a fee to offset the thrifts' expenses for marketing the loans but will book the loans and retain the interest income and fees.

California Federal expects to take 25 SBA loan applications a month and approve half, said J.W. Lewis, the thrift's business banking product manager.

Mr. Lewis said the $30 billion-asset thrift has offered small-business term loans and credit lines but did not routinely make SBA loans. Bankers have long complained that SBA loans require specialized and expensive training of lenders and have lamented long waits for loan approvals from the federal agency.

But increased competition from nonbank lenders and specialized bank lenders has forced many bankers to turn to the government-guaranteed loan program.

The SBA lending market is especially competitive in California, home to the Money Store - the leading SBA lender nationwide - and six banks that rank among the top 25 SBA lenders.

"It gives us 30 more sales representatives in one of the most populated places in the country," Mr. Stapert said. "They'll act as a very large referral service."

Last year, more than 5,500 SBA loans for a total of $1.34 billion were made in California, accounting for 17% of the dollars lent nationwide through the government program.

For Zions, access to California Federal's 228-branch network is a giant step toward realizing its ambition to be a nationwide SBA lender. Zions has 13 SBA loan production offices in 14 states.

Zions was the nation's 11th-largest SBA lender last year, making 186 7(a) loans totaling $51.8 million, according to SBA statistics. While that's a large volume, Zions trails the nonbank lenders.

"My goal is to be known nationally as a small-business boutique and get to as many worthy small businesses as possible," said Anthony J. Feraro, senior vice president of Zions First National Bank.

Mr. Lewis said the Los Angeles-based thrift wants to use Zions' preferred-lender status and skills to help it build an instant image in the market.

The SBA requires lenders to show a track record of sound SBA lending to become preferred lenders, which lets banks make their own lending decisions rather than waiting for SBA approval.

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